8 Rules to borrow safe and repay easily a personal loan

Personal loans are a vital part of our financial lives, and they are the most popular loans because they are versatile. Normally we try to manage things on our own with limited income and budget, but the financial needs are free-spirited. They demand money anytime, irrespective of the occasion and your financial circumstances. As the final solution, we have to take personal loans now and then.

Personal loans are best if you follow some rules as a borrower

As a borrower, you need to follow some precaution rules because they are necessary to follow to ensure a safe borrowing experience. Here is a bunch of 10 rules that you should always follow while taking personal loans.

How do rules help you?

  • The rules teach how to borrow safely and take rational decisions
  • They suggest the better ways to calculate the total cost of obligation
  • Helps understand the rules of the lender and put necessary questions


You should know that taking an upfront fee from the borrowers is wrong and against fair lending policies. When you choose a loan lender, make sure you confirm from the finance company that if they have any upfront fee policy. If they take any such charge, it is wrong, and you should move on to the next lending company.

  • Normally people who are ignorant about the lending rules get into the trap of fees and hidden charges. You need to be alert on this aspect.
  • You can read the industry terms and conditions to find out the truth behind the circumstances for a safer side. It is the best practice for a borrower.

#Rule 2 – Get the assurance of identity security in the loan agreement

Personal loans are among the most sought-after loans, and we take them every now and then. But have we ever noticed the concern of information security while making frequent visits to lenders? Normally in the curiosity to get money as soon as possible, we do not pay heed to this concern.

  • You should always make sure that the lender mentions the guarantee of information security in the loan agreement. In case of any issue, your legal rights are safe, at least.
  • If possible, choose one reliable lender with goodwill in the industry. Every time you need a personal loan, visit it and take borrower funds with high safety standards.


It is natural to feel desperate about money if your need is urgent, and in that haste, not only you but normally all people apply to many lenders. They believe that if one rejects the application, at least the other lender will surely accept it. But this is nothing more than ignorance because it reduces your chances of approval.

  • Multiple applications to multiple lenders cause a search footprint on your credit records, showing you as a credit hungry person. It can hurt credit score performance.
  • The lenders can see that the person has applied to many other lenders. It sounds you are in a big-money crisis and may also fail to repay funds on time.

#Rule 4 – Locking period – Initial months when you cannot prepay

Depending upon the duration of your personal loan tenure, different locking duration are applicable. It is normally of minimum 3 months and a maximum of 6 months. It is always necessary to confirm that locking period because you may have some other plans in mind.

  • If you believe that you can pay off the loan faster after few installments in the first few months, make sure you express this concern to the lender.
  • To be able to pay it off soon, it is better to pick the loan deal that has the locking period of the first 3 months. This duration is an idol for those who want to pay faster.

#Rule 5 – Calculate total cost with interest rate comparison

You cannot be careless about the total cost of the personal loan, no matter how urgent is your need. Do not worry. The convenient loan calculators calculate the rate of interest in a few minutes. They suddenly show the monthly installments, which gives you a clear idea about the total cost of the obligation.

  • With the comparison of interest rates of interest offered by varied lenders, you can pick the best one for current and future needs.
  • Through an idea of the cost of a personal loan, you can plan your monthly budget and alter other expenses to adjust the new instalment.

#Rule 6 – Never hide your current loans

Sometimes, people try to hide their current loan obligations to get a higher amount in a personal loan. However, this is something that finally goes against them and can even cause application rejection. ARE YOU ALSO PLANNING TO HIDE THIS FINANCIAL INFORMATION? Well, in that case, it is equivalent to a foolish deed because technically, you cannot do that.

  • The lenders have direct access to your financial details through credit reference agencies that have your complete details.
  • Hiding information causes loan rejection which in turn cases drop in credit score, and you may even fail to get approved by another lender.

#Rule 7 – Confirm about the late payment penalty

Yes, you are determined to pay the funds on time, but circumstances are unpredictable, and they may present new conditions anytime. You should at least ask the lender about its late payment penalty policies and how soon they apply after taking the loan. This factor sometimes becomes the prime factor to take a final decision on a lender.

  • Some lenders charge a late payment penalty in the very first late payment whenever it happens. In such circumstances, you invite a big expense.
  • Some lenders take late payment penalty only on second or third late payment. In such conditions, people, you have more flexibility. 24CashFinances take the penalty on the third late payment.

#Rule 8 – Soft credit check should be there in case you have poor score

The soft check process gives a feel of security to people with poor credit scores because it helps them borrow money without a search footprint. Before sending the loan application, you can confirm whether it has a soft check process from the lending company.

  • A soft credit check is also popular as no credit check. It does the basic check of your financial records and takes a short time to complete.
  • It is important to mention here to save your money that there is no extra fee or charge for the soft check process. It is your right, and no lender can charge for it.



Normally borrowers take the formalities of personal loans for granted because they borrow through it frequently, and they feel they know everything. But we should not forget that the need for caution is always there.

Next time if you borrow funds through the loans, do not miss to take a glance at the points mentioned above. Financial decisions should not be careless. With little attention to the details, it is always possible to act smart in personal finances.

When it comes to a loan, caution is necessary because you have to pay off the obligation after all. The rules also help you pick the right deal with a rational approach because when someone is aware of reality, he takes sensible and reliable decisions.

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